Getting Web 2.0 right: The hard stuff vs. the harder stuff

I had a powerful conversation recently in Europe with one of the top executives of a major industrial company. They have 100K+ employees in over 50 countries. When he joined five years ago their business was struggling and in need of major transformation; their stock was at two dollars a share, they had ethics issues and product quality problems – you name the malady, they were suffering from it

Fast forward to 2008 and now they are one of the most extraordinary success stories in Europe – stock is over $28 a share, great profits, growing operations, well regarded in the business community etc. When you fly through a European airport they are everywhere.

I asked him how they were able to turn such a large, multinational ship around.

He told me most executives talk about “the hard stuff” vs. “the soft stuff”. Their focus for success in the organization is on the hard stuff – finance, technology, manufacturing, R&D, Sales – where the money is to be found, where costs savings are to be made. The soft stuff – leadership, culture, change and implementation – is there in rhetoric but not in reality (e.g., “people are our most important resource”). But the truth is that it is not the “hard stuff” vs. the “soft stuff”, but the hard stuff vs. the harder stuff. And it is this “harder stuff” that drives both revenues and profits by making or breaking a decision, leading a project to a successful conclusion – or not, and allowing for effective collaboration within a business unit or an organization – or not. He told me it was a consistent focus on the harder stuff that allowed them to turn their company around.

This is an apt description of the problems we face in bringing Web 2.0 into the enterprise. Web 2.0 is a game changer – it holds the potential to turbo-charge back office functions, foster collaboration and transform every business unit in the enterprise. Yet the resistance occurs when it comes down to implementing Web 2.0 because it represents a series of shifts that challenge traditional business culture and models of leadership. How often have I heard the knee-jerk reaction, “we can’t let our customers talk to each other” or “we don’t share our data” or “we are going to upgrade to a new platform – we are on a three year plan to get it done” (I keep a list of these reactions so please help me add to it). If developing a web 2.0 strategy is the hard stuff – moving that strategy forward is the harder stuff – and the bigger the company I work with – the harder the harder stuff is.

Sometimes the “hard stuff” – particularly IT – can drive positive “soft” change, by providing affordances for desirable behavioral changes. In our case, providing suitable decision software can be an IT wedge for more collaborative, more rationale decision processes.

Hi Tim,
I agree with you that IT can drive positive change. I am just not sure that this is a game changer for large organizations. Those web-native companies that have scaled (e.g. Google and Amazon etc.) are now large but seem to carry with them the DNA that still embraces rapid change. How do we bring that DNA into big, traditional companies? That, to me, is the harder stuff.

“Yet the resistance occurs when it comes down to implementing Web 2.0 because it represents a series of shifts that challenge traditional business culture and models of leadership.”

That is the money quote. IMO, t can’t really change quickly until the DNA changes. That means at the very least, some discontinuous or disruptive change to the organization. More likely it is death and replacement by new companies with different DNA.

Implementing 2.0 stuff doesn’t necessarily to be very difficult to implement. If I relate to my experience there are at least two ways do it wrong:
1) Top down push (employees, middle management just gets another tools, and do not experience any advantages)
2) Technology push (advantages are unclear, most often a geeky solution with less usability).

What I think you should do is to identify what would drive this people. What would make them to use / adopt a new tool. Is it time saving, is it the ability to work at home, it’s money saving, opening a new market for their product, inexpensive innovations (Lego Case *)). Technology push will not help to implement a 2.0 tool, having a useful tool that match their business and change drivers will help you to make adoption and implemention easier.

*) Concerning Lego: Lego used to have 100 designers creating 300 designs a year and the average age of a designer was appr 29 years. By introducing Lego Factory they now have 1 million designers creating 3 million designs a year and the average ago of designer is appr 9 years (and these 1 million people do not have to be payed by Lego!)

@ Rick
I agree that tools are a distraction and I think this is a very useful way to think about the issue in terms of traditional business objectives and adoption. However this frames Web 2.0 as an incremental improvement to business as usual (better customer intimacy, better operational efficiency, better innovation) rather than a game-changer (customer/employee led innovation, rethinking IP, rethinking the whole concept of marketing etc.). IMO It is the more radical potential that isn’t being tapped into.

In the case of Lego my understanding is that it required senior leadership to make some big changes in the way that they conceived of and executed on innovation and that they also had to rethink their notion of IP. Lego’s story is one of transformation.

Don’t you think that both leadership (and I mean leadership in a “2.0” way; leadership that allows leaders to surface at all levels of the organization) and your model of change need to be aligned for real business transformation?

@Joshua-Michéle
I agree with you that, to implement 2.0 things successfully, you should have leadership which is in line with the 2.0 concept. Without leaders2.0 (horrible use of the term 2.0 by the way) you cannot implement anything that will look like 2.0, since those people prefer command and control over collaboration and co-creation.